Zimbabwe banks run out of foreign currency

Monday 23rd March 2009 15:41

Harare – MYSTERY surrounds the failure by some Zimbabwean banks, particularly the State owned POSB, to avail this month’s salaries for public servants, soldiers and employees of State utilities which saw thousands of desperate workers stranded over the weekend with most forced to sleep outside the financial institutions.

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There are reports that the country could fall into a serious security situation as army members and other law enforcement agencies fail to access their salaries.

This is despite earlier assurance by the new Finance Minister, Tendai Biti, who assured the nation that the new inclusive government had obtained funding from donors and other external sources to meet the salaries.

A Dutch radio VOP reporting from Harare says it has it on authority that the Finance Minister had on Friday last week ordered some banks to disburse the funds or face prosecution.

He is said to have issued the ultimate to banks such as the State owned Agri-Bank raising suspicion that some corrupt bankers may be delaying disbursing the money in order to enable them to spin the funds for personal profit.

Such racketeering has been common in Zimbabwe in the past particularly when the parallel black market was thriving.

Some corrupt bankers made fortunes by abusing depositor’s funds to finance the lucrative money changing business.

There are also increasing concern that bankers and public servants may in fact be against the inclusive government formed when Zimbabwe’s the three main political parties, Zanu (PF), and the two Movement for Democratic Change (MDC) formations led by Morgan Tsvangirai and Professor Arthur Mutambara signed the Global Political Agreement signed on the 15th of September last year.

These consist of those who largely benefited from the rot and corruption that had entrenched itself in Zimbabwe and were not keen to see transparency being the order of the day as they stand to lose the spoils of graft.

The top government officials, particularly those in the defense forces were determined to derail the success of the inclusive government because they argued that if it succeeded it would boost the electoral fortunes of Tsvangirai’s MDC formation at the polls to be held within two years as agreed.

Zimbabwe’s military junta’s top brass such as the defence commander Constantine Chiwenga, Air force chief Perence Shiri, Police Commissioner General Augustine Chihuri, Director General of the spy agency, the Central Intelligence Organisation, Happyson Bonyongwe and Director of Prisons, Paradzai Zimondi, have publicly vowed they will not salute Prime Minister Tsvangirai, claiming that he has no war credentials, is a puppet of the West and therefore unfit to rule Zimbabwe.

However Zimondi is said to have retracted his statements over the weekend.

The utterances had not gone down well with the majority of Zimbabweans, most of who now regard Tsvangirai and his team to be responsible for their fast changing fortunes in the country as basic commodities, services are not only now abundant but are becoming more affordable.

Some financial institutions are reportedly limiting cash withdrawals or demanding that clients retain part of their deposits in their accounts, money which the banks are suing to fund their other investments such as the lucrative equities market, real estate and other portfolios.

But Zimbabwe’s bankers deny any wrong doing and instead put the blame squarely on the government.A top official with a leading commercial bank who requested anonymity said:

"The problem is that of the government which wants to shift the blame to commercial banks whilst it is itself responsible for the present woes and we have evidence of a deliberate death for finance houses by some people.

"The present state of affairs has reduced us to being mere conduits of funds where our role is to just act as paymasters for the public. How do they then expect us to survive? Instead the government should hand over to finance houses all foreign exchange so that they use it to lend to exporters and the productive sector".

Financial institutions traditionally generated much of their profits from lending money to merchants and manufacturers who in turn generate more foreign exchange from exports.